Friday, October 7, 2011

Who audits the Auditor?

At neighborhood meetings, citizens - skeptical and mistrustful of all government operations, even the auditor's office - have often asked me, "Who audits you, Gallagher?"

This question poses and interesting matter for citizens who want to make sure that their elected auditor is performing truly independent audits and fighting for the best interests of the taxpayers of our city.

Government auditing standards dictate that audit agencies, including our office, shall have a "peer review" of our audit work every three years. In October of 2009, the Audit Services Division of our Denver auditor's office went through an external peer review of its work. The peer review team was made up of three audit professionals, three accomplished audit managers representing local government audit functions from around our country. The peer review team is selected by the Association of Local Government Auditors. We have no say on whom we get to audit our office. The team stays with us for about a week and examines all our audits and all our processes. That's how they make sure our office is in compliance with the highest possible level of compliance of Association of Local Government Auditing Standards promulgated by the Comptroller General of the United States. The peer review team members are always from out of state, so it does not even look like we have a conflict of interest by bringing in friendly auditors whom we know. In Denver our auditor's office staff wants to be held to the highest ethical and professional standards.

I am proud to report to you that the peer review audit team found the Audit Division in our Denver Auditor's Office excels in many core audit tenants and processes. The team liked that our office fostered an excellent system of internal controls necessary for compliance with professional standards. The peer reviewers determined that our performance audits added significant value to city operations. The review team identified several best practices used by the Division. These practices were a result of the restructuring of our Auditor's office due to an amendment to our city charter. The outside peer auditors congratulated our office on gaining true structural and legal independence. They noted especially the audit planning techniques used to formulate our annual audit plan. The peer reviewers commented on our use of formal risk assessment tools and project planning and budgeting processes. They noted the high quality and expansive reporting practices used by the Division. The peer reviewers agreed with our progressive management and supervisory techniques especially our decision to move to all electronic working papers. This means we save thousands of trees since this change was implemented. Who says an auditor can't be green? Our peer reviewers even said they saw techniques from our Denver Model which they wanted to take back to their home offices.

I wish to congratulate and thank our Internal Audit Division for the great work they have done to merit such outstanding praise.

Our next peer review team will visit us in 2012 for our next review. We look forward to their auditing the auditor.

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